Vegetable market softens, good volume expected through holidays

by Tim Linden | November 26, 2013

Vegetable producers in the West have had a very good run this fall with strong demand outstripping supplies, but moving forward supply and demand are expected to be in sync and prices have come off considerably.

Nick Pappas, who is on the sales desk for Salinas, CA-based Bengard Ranch Inc., told The Produce News Nov. 25 that good supplies were available on basically all vegetables for the Thanksgiving push and the same is expected throughout December, assuming the weather cooperates.

Speaking several days before Thanksgiving, he said business was typically slow as all the shipments, even the West Coast ones, were already in the pipeline.

"I see no problems over the next two weeks filling orders," he said.

While it rained prior to the weekend of Nov. 23-24, and temperatures were in the low 60s over that weekend, the mercury had jumped 10 degrees by Nov. 25 and temperatures in the mid-70s were forecast for the following 10 days.

Pappas said the warm weather should keep the crops on schedule and produce good volume moving into the Christmas pull in mid-December.

"Right now the crops are running a little bit ahead of schedule," he said. "If it turns cold, things could change."

Pappas said virtually all of the vegetable crops had come off their high fall price levels and were trading "in single digits or the low teens."

Mark McBride, who is on the sales desk for Coastline in Salinas, CA, agreed that weather is the most important factor moving into December. He said the rainy weather on Friday, Nov. 22, "threw us off schedule a little bit," but added that the Thanksgiving pull was over so there was no affect on pricing.

"Right now, we have good volume and it appears as if everyone has planted their normal acreage for the winter harvest," he said Nov. 25. "The only question mark is the weather."

McBride said that while growers and shippers enjoyed the hot fall market, "that extended period of high prices meant we didn't have that much volume and there weren't a lot of opportunities for promotion."

Moving forward, he said, "now we should have good volume and hopefully we will gets lot of retail promotions going."

Pappas said that labor is the other factor that could adversely affect supplies in December. "Labor is always a key issue," he said. "It's always a concern getting full crews."

Because of tightened border security, it is no secret that labor shortages have occurred off and on throughout the summer and into the fall. Lack of production in the fall no doubt eased the situation.

Jason Resnick, vice president and general counsel at Western Growers Association, based in Irvine, CA, said it appears as if the labor needs for the winter vegetable deal have been dealt with adequately. He said grower-shippers in that district have become quite adept at using the U.S. Department of Labor's H2A temporary foreign worker program, with those workers now making up about 30 percent of the winter agricultural labor force. That district uses H2A workers during its season to a much greater extent than any other Western vegetable deal.

"During the government shutdown [in early October] there was a concern that those H2A applications were not going to get processed quickly enough and we'd have a problem," said Resnick. "But that didn't materialize, largely because we were successful in getting ahead of the situation."

He said the temporary workers typically began their service in early to mid-November and work through mid-April.